Spouses Rodelio v. Bpi Family Savings Bank

Summary

The Supreme Court affirmed a banking loan collection case where borrowers defaulted on vehicle financing after their car was totaled in an accident. Despite collecting insurance proceeds, the Poltan spouses failed to settle their obligation with BPI Family Savings Bank. The Court rejected their due process claims, noting they had multiple opportunities to appear but repeatedly failed to do so. However, the Court significantly reduced the contractual interest rate from 36% to 12% per annum and attorney's fees to P50,000, applying Civil Code provisions on unconscionable penalties. The decision establishes important precedent on judicial reduction of excessive interest rates in loan agreements and reinforces that contracts of adhesion, while valid, cannot contain unconscionable terms. The case demonstrates courts' equitable power to modify harsh contractual penalties while upholding the fundamental validity of secured lending arrangements.